Topic: [WARNING] Stay away from BRC-20 tokens - they are doomed in the long term - page 2. (Read 416 times)
May 08, 2023, 09:42:50 AM
I know that alot of crypto freaks would have been so enthusiastic in going for this same brc20 token that has caused controversial outcome to the bitcoin network raising the transaction fee, i know that it would have resulted to the hype experienced on this same token which i may termed it as garbage in and garbage out, anything that has to do with tokens is not a very good idea to run an investment on because they way they run fast to grow will also be thesame way it may comes down, this is one of the simplest truth about tokens, using the bitcoin network doesn't make any difference from being what they are, bitcoin is bitcoin while tokens are tokens but at this time, we are having this kind of token o the bitcoin blockchain network instead of smart contracts, don't invest if you're not having that kind of thicker skin for taking a risk on NFTs.
May 08, 2023, 03:19:57 AM
BRC-20 tokens aren't NFT because there's no uniqueness of one to another, so it's just like altcoins created in Bitcoin network. It seems all the BRC-20 tokens has a limit supply, since it's already minted 100% and many people join this hype, this make the price of the token skyrocketed.
Oh alright, Ive been able to understand more so indeed its happening on bitcoin network.Ive been able to understand more upon reading this article from coingecko.
https://www.coingecko.com/learn/bitcoin-ordinals-nft
It seems that domo created a way to fully launch nft or called ordinals in btc network. This could really affect regular btc users as transaction fees are too high, it seems this hype is for web3 peeps and people who are into nft collections and of course money grabbers, and flip takers.
May 08, 2023, 02:48:30 AM
Can you explain whats happening out there. Ive seen a lot of social influ posting about it and its like people are grabbing some attention with this. Ive seen some nft with prices skyrocketed. So this domo on twitter the creator created a very contorversial tech?
BRC-20 tokens aren't NFT because there's no uniqueness of one to another, so it's just like altcoins created in Bitcoin network. It seems all the BRC-20 tokens has a limit supply, since it's already minted 100% and many people join this hype, this make the price of the token skyrocketed.As you can see there are few tokens has 300%+ price increase in just 24 hours, people are looking for flipping their money.
https://brc-20.io/
May 08, 2023, 02:35:21 AM
I just don't think the hype will last as long as nft tokens on other networks like ERC20 or BSC20. However bitcoin is not oriented towards this technology, nft and token enthusiasts will not find a better efficiency solution (if they saw this sooner) despite migrating to the bitcoin network.
In conclusion, the hype isn't going to absorb more fans of past nft hype just by looking at the current average transaction fees.
In conclusion, the hype isn't going to absorb more fans of past nft hype just by looking at the current average transaction fees.
May 08, 2023, 02:30:06 AM
I think when the BRC-20 hype trend is over, this happen when the token price isn't increase higher than the fees they've spend, so the project will consider to use the other alternative chain like counter party, OMNI and RGB you mentioned above. But AFAIK those chain is really underrated, not many people use it, so it's not liquid.
Can you explain whats happening out there. Ive seen a lot of social influ posting about it and its like people are grabbing some attention with this. Ive seen some nft with prices skyrocketed. So this domo on twitter the creator created a very contorversial tech? May 08, 2023, 02:17:25 AM
Nice write up.
I think when the BRC-20 hype trend is over, this happen when the token price isn't increase higher than the fees they've spend, so the project will consider to use the other alternative chain like counter party, OMNI and RGB you mentioned above. But AFAIK those chain is really underrated, not many people use it, so it's not liquid.
Even there's a vulnerability with the ordinals and BRC-20 token, people will not care, just like how many DEFI and NFT scam out there. They only care with the hype and liquidity.
BRC-20 wouldn't destroy Bitcoin, but it make the true usage of Bitcoin e.g. as a currency, will be harder because it's not convenient to use it for daily transaction.
I think when the BRC-20 hype trend is over, this happen when the token price isn't increase higher than the fees they've spend, so the project will consider to use the other alternative chain like counter party, OMNI and RGB you mentioned above. But AFAIK those chain is really underrated, not many people use it, so it's not liquid.
Even there's a vulnerability with the ordinals and BRC-20 token, people will not care, just like how many DEFI and NFT scam out there. They only care with the hype and liquidity.
BRC-20 wouldn't destroy Bitcoin, but it make the true usage of Bitcoin e.g. as a currency, will be harder because it's not convenient to use it for daily transaction.
May 08, 2023, 01:55:07 AM
Ive seen it on Twitter and even major platform like icodrops show the topic about BRC-20. This will be another hype. Of course for degen users this is a possible money printing but for bitcoin maxi this is bullshit project. I think this will be hyped but not will sustain its long term plan like they wanted. Experimental could be good but also dangerous.
Bitcoin has its reputation of being decentralized and this idea will not boost it more. Its still like an altcoin which being related to bitcoin. Even Saylor wouldnt mind this.
Bitcoin has its reputation of being decentralized and this idea will not boost it more. Its still like an altcoin which being related to bitcoin. Even Saylor wouldnt mind this.
May 08, 2023, 12:27:54 AM
There is a new hype in Bitcoinland - so called BRC-20 tokens. They are advertised by some of their holders as "the equivalent in Bitcoin for the Ethereum-based ERC-20 tokens". They were created in March 2023, are fungible (so they are no NFTs) and based on the so-called "Ordinals" technology introduced in late 2022.
You may be interested to invest in this tech, maybe even create a token yourself. But I think this is a bad idea - these tokens have a lot of disadvantages. It is possible, and in my opinion likely, that they will not have a very long life.
First of all: BRC-20 is, by far(!), not the only way to create tokens on the Bitcoin blockchain. There are more than a dozen token standards for Bitcoin since at least 2013/14. Some are quite popular and have a long history, with years of improvements, like Counterparty and Omni, and some offer advanced features like compatibility with Lightning Network (RGB, Taproot Assets [1]).
Now to the disadvantages:
1) BRC-20 tokens are extremely limited in their functionality. Not only don't they support smart contracts (like ERC-20 tokens do), nor DeFi [2], nor even Lightning Network. Due to their technical conception it is very difficult that they will support these things in the future.
2) The creator itself, @Domodata, has described them as an "experiment", and has warned that they may not be worth anything.
3) They may have undiscovered flaws. They're only 2 months old. Software often has bugs, and so may have Ordinals and BRC-20.
4) They are extremely inefficient. This is, in my opinion, the most important disadvantage. Not only BRC-20 token creations, but also all transfers of tokens cost two transactions, because they need to be "inscribed" as an Ordinal in the blockchain. All other token protocols I mentioned above need only one. That's not something only of importance for some maxis or nerds.
It will cost holders money, because the more space a token transfer needs, the more fees you will have to pay in each transfer. For a simple BRC-20 transfer you will have to pay about two times the fee of that to transfer any other Bitcoin-based token. And additionally, the way the parameters of the coin are stored is very inefficient.[3]
5) (new and important!): They very likely will not be stored permanently on the blockchain, so eventually they will be unavailable or only kept by "archival nodes" which will charge access for it. See this post from gmaxwell for more details. So BRC-20 tokens will eventually "disappear". They are doomed in the long term.
The only advantage they have is actually: They are "new and hot". There's currently a "fad" around them, so very, very fast early adopters could still earn money with them, e.g. with a meme coin. But don't wait too long. You may be holding a very annoying (due to the fees to transfer them) and costly, but potentially worthless bag.
Still like the idea of tokens and meme coins on Bitcoin?
There are a lots of alternatives, but for new users I recommend two, and there is one more for advanced users:
- Counterparty - developed since 2014, has lots of features, supports also NFTs, even meme tokens have already been created there, some long times ago ("Rare Pepes", one of the first NFT collections ever). Lightning and smart contract features are in development.
- Omni - developed since 2013 (originally as Mastercoin), best known because the stablecoin TetherUSD (USDT) is based originally on this technology. Lightning support is in development.
- RGB - one of the most modern and efficient token protocols, developed since 2017 (whitepaper was published in 2016). It is not only compatible with the Lightning network, it was specifically designed for off-chain transfers. This may be a very interesting technology once fees become higher in the long term. It is however still in its initial stages.
- Taproot Assets (formerly known as Taro). Another modern standard which support Lightning, now being tested on mainnet. They have some similarities with RGB in that the tokens rules can be set off-chain, but there are also some differences in the way the tokens are stored and transferred.
And there are also altcoin platforms with much less congested blockchains you can use.
PS: This is no investment advice. Do your own research. But my personal opinion about BRC-20 tokens is that their future looks very, very bleak. It is also not against the technology itself - it may be an interesting tech test. But IMO it has come way too far, and I fear many will lose lots of money with it.
[1] There was a trademark lawsuit regarding the name of this protocol, called initially "Taro". The name was now officially changed to Taproot Assets.
[2] Contrary to popular belief some DeFi applications can be implemented in Bitcoin, but not with the BRC-20 standard and in a different way than with ETH. Counterparty for example has an experimental implementation, but it is not usable still for production. RGB may be eventually a better alternative.
[3] BRC-20 inscriptions are JSON texts. This means that not only the metadata itself is inscribed, but also the names of the parameters to store, even the special characters. Other token protocols don't do that, so the metadata only occupies half to two thirds of the space required by BRC-20.
You may be interested to invest in this tech, maybe even create a token yourself. But I think this is a bad idea - these tokens have a lot of disadvantages. It is possible, and in my opinion likely, that they will not have a very long life.
First of all: BRC-20 is, by far(!), not the only way to create tokens on the Bitcoin blockchain. There are more than a dozen token standards for Bitcoin since at least 2013/14. Some are quite popular and have a long history, with years of improvements, like Counterparty and Omni, and some offer advanced features like compatibility with Lightning Network (RGB, Taproot Assets [1]).
Now to the disadvantages:
1) BRC-20 tokens are extremely limited in their functionality. Not only don't they support smart contracts (like ERC-20 tokens do), nor DeFi [2], nor even Lightning Network. Due to their technical conception it is very difficult that they will support these things in the future.
2) The creator itself, @Domodata, has described them as an "experiment", and has warned that they may not be worth anything.
3) They may have undiscovered flaws. They're only 2 months old. Software often has bugs, and so may have Ordinals and BRC-20.
4) They are extremely inefficient. This is, in my opinion, the most important disadvantage. Not only BRC-20 token creations, but also all transfers of tokens cost two transactions, because they need to be "inscribed" as an Ordinal in the blockchain. All other token protocols I mentioned above need only one. That's not something only of importance for some maxis or nerds.
It will cost holders money, because the more space a token transfer needs, the more fees you will have to pay in each transfer. For a simple BRC-20 transfer you will have to pay about two times the fee of that to transfer any other Bitcoin-based token. And additionally, the way the parameters of the coin are stored is very inefficient.[3]5) (new and important!): They very likely will not be stored permanently on the blockchain, so eventually they will be unavailable or only kept by "archival nodes" which will charge access for it. See this post from gmaxwell for more details. So BRC-20 tokens will eventually "disappear". They are doomed in the long term.
The only advantage they have is actually: They are "new and hot". There's currently a "fad" around them, so very, very fast early adopters could still earn money with them, e.g. with a meme coin. But don't wait too long. You may be holding a very annoying (due to the fees to transfer them) and costly, but potentially worthless bag.
Still like the idea of tokens and meme coins on Bitcoin?
There are a lots of alternatives, but for new users I recommend two, and there is one more for advanced users:
- Counterparty - developed since 2014, has lots of features, supports also NFTs, even meme tokens have already been created there, some long times ago ("Rare Pepes", one of the first NFT collections ever). Lightning and smart contract features are in development.
- Omni - developed since 2013 (originally as Mastercoin), best known because the stablecoin TetherUSD (USDT) is based originally on this technology. Lightning support is in development.
- RGB - one of the most modern and efficient token protocols, developed since 2017 (whitepaper was published in 2016). It is not only compatible with the Lightning network, it was specifically designed for off-chain transfers. This may be a very interesting technology once fees become higher in the long term. It is however still in its initial stages.
- Taproot Assets (formerly known as Taro). Another modern standard which support Lightning, now being tested on mainnet. They have some similarities with RGB in that the tokens rules can be set off-chain, but there are also some differences in the way the tokens are stored and transferred.
And there are also altcoin platforms with much less congested blockchains you can use.
PS: This is no investment advice. Do your own research. But my personal opinion about BRC-20 tokens is that their future looks very, very bleak. It is also not against the technology itself - it may be an interesting tech test. But IMO it has come way too far, and I fear many will lose lots of money with it.
[1] There was a trademark lawsuit regarding the name of this protocol, called initially "Taro". The name was now officially changed to Taproot Assets.
[2] Contrary to popular belief some DeFi applications can be implemented in Bitcoin, but not with the BRC-20 standard and in a different way than with ETH. Counterparty for example has an experimental implementation, but it is not usable still for production. RGB may be eventually a better alternative.
[3] BRC-20 inscriptions are JSON texts. This means that not only the metadata itself is inscribed, but also the names of the parameters to store, even the special characters. Other token protocols don't do that, so the metadata only occupies half to two thirds of the space required by BRC-20.
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